On 9 November 2020, the European Securities and Markets Authority (ESMA) issued a consultation paper concerning guidelines on marketing communications under Regulation 2019/1156 on facilitating cross-border distribution of collective investment undertakings (the Regulation).
Article 4(6) of the Regulation requires ESMA to issue guidelines by 2 August 2021, and thereafter update those guidelines periodically, on the application of the requirements for marketing communications referred to in Article 4(1) of the Regulation (the Guidelines). According to Article 4(1), AIFMs, EuVECA managers, EuSEF managers and UCITS management companies (referred to collectively as fund managers) shall ensure that all marketing communications addressed to investors are identifiable as such, that they describe the risks and rewards of purchasing units or shares of an AIF or units of a UCITS in an equally prominent manner, and that all information included in marketing communications is fair, clear and not misleading. Each of these requirements are detailed in separate sections of the Guidelines. Furthermore, Article 4(6) of the Regulation, provides that the Guidelines shall take into account the online aspects of marketing communications. As this is a general requirement that can apply to all aspects of marketing communications, ESMA is of the view that it should not be detailed in a separate section of the Guidelines, but rather treated as an aspect of all other requirements mentioned in Article 4(1) of the Regulation.
Since the scope of the Regulation is limited, by virtue of its Article 2, to fund managers, only these entities are subject to the Guidelines. Consequently, distributors, such as investment firms, are not subject to the Guidelines as such, although they may have to apply other rules governing the information issued to investors or potential investors, such as Article 44 of the Commission Delegated Regulation (EU) 2017/5655 , which contains conditions for ensuring fair, clear and not misleading information to clients.
ESMA acknowledges that the distribution of funds is often carried out by distributors rather than directly by their fund managers, and that discrepancies between the requirements applicable to fund managers marketing the unit or shares of the funds that they manage and those applicable to distributors should be avoided, where possible. To this end, the requirements set out in the Guidelines have been designed to be substantially equivalent to those set out in Article 44 of the Commission Delegated Regulation (EU) 2017/565.
The deadline for comments on the consultation paper is 8 February 2021.